Parenting, don’t fool yourself, it never ends – and you don’t want it to!

Good parenting never stops. You can always have a positive impact on the lives of your children, if you pay attention and employ good thinking. This remains true after they leave home, after they graduate college, after they get their first job, after you get a divorce, after they get a divorce, after they have kids, and so on.

Loving them no matter what

My divorce was quite unpleasant. After my ex-wife and I separated, my children were upset. One expressed anger and wanted little to do with me. I made clear that I cared and wanted to be in his life. So, over time, that attitude changed.

After some time, we met for dinner. The evening seemed to be going calmly, but then I said something that brought out his anger. I sat and took it. Because I listened to his anger, and continued to make clear that I loved him no matter what, this was a turning point. We have grown much closer since that evening.

Celebrating holidays

Holidays are always challenging. One year, in September, I asked about Thanksgiving. The response was, “I thought you said seeing us on Thanksgiving was not important to you.” I said that I had feelings that made me realize that was not completely true.

However, I backed off and I sent an e-mail saying that what was really important was to see my children together on any day, regardless of what day was. A few days later, I got an email saying that they wanted to join me for Thanksgiving. Messages like that will bring tears to your eyes! (And that was the best Thanksgiving ever!)

Finances

As an attorney and financial planner, I try to make sure my children plan well. On the other hand, I know saying too much turns into prying into their lives when they are striving to be independent. It can make them feel badly, as if they are not doing well or as if I am being critical.

After the divorce, my daughter needed some support from me. I asked if her mother was helping. She said yes, so I never asked again and provided what she said she needed.

Much later, I learned that she amassed several thousand dollars in credit card debt during this time. When she told me this, she also told me that she paid it off. Such an impressive accomplishment; you have to be proud of that!

Conclusion

So, my learning never stops, because I want to be better as a parent.
I count myself very fortunate for the close relationship I have with my children.
And what I can do to help my children continues!

Cancer, I try not to talk about it

I had cancer. If you have had cancer, or know anyone who has, you know it changes your life – forever.

If you are lucky, and you live, each day is special in a new way.

When I first wrote this, I had just attended a wake for a friend who was 51 and in great health, or so we thought. He played basketball, rode a mountain bike, trained in karate … then died from heart attack.

It’s over a year later, so why am I talking about this now? I don’t want anyone to starve themselves today for a future they may never see.

I am not saying spend everything living today. But I am saying find a balance!

Yes, “balance,” that mindfulness term that applies to financial planning. Enjoy what you can today without making your future a mess, and make your future good enough so you can enjoy today.

Got it? I hope so.

P.S – please see my Pan-Mass Challenge profile for more on my response to having had cancer and losing a dear friend. (The answer is obvious: I ride to raise money to save others!)
Great photo of some young PMC riders!

Year-end planning, 2016 version

The election of Donald J. Trump could have a significant impact on your finances. Individual and corporate tax laws may change, the Affordable Care Act may be eliminated, trade war may ensue, infrastructure building may boost jobs and sectors of the economy, and national defense and diplomacy could lead almost anywhere – your guess is as good as anyone else’s.

So then, how do you incorporate this into year-end planning? Very carefully!

Corporate Taxes

Our analysis starts with a review of his proposal to limit corporate income taxes to 15% as a way to illustrate how tricky planning is:

Analysis of the way this limit applies to pass-through entities suggests that the 10-year cost could be anywhere from $4.4 trillion, assuming owners of pass-throughs pay 33% tax, to $5.9 trillion, assuming owners only pay a 15% tax.

Those are hefty cost numbers, which is why it is tricky to assume that any major tax changes will be enacted in 2017.

Income Taxes

There could be three rates on ordinary income: 12%, 25% and 33%, with the latter starting at $225,001 for married filers and $112,501 for single filers. The 0.9% and 3.8% Affordable Care Act surtaxes on upper-incomers would be eliminated. So would the AMT (“alternative minimum tax”). The 20% maximum capital gains tax would remain. Standard deductions would go up, personal exemptions would be eliminated and breaks for dependent care would be increased.

Check here for 2017 tax rates.

Estate taxes

The President Elect has revised his estate tax proposal, calling now for pre-death tax on appreciation in assets of large estates, subject to a $10-million-per-couple exemption. This may be accomplished by limiting the step-up in basis for heirs who inherit capital assets from large estates.

Another change would be elimination of the IRS’s proposal to restrict the use of valuation discounts for gift and estate tax purposes on intrafamily transfers of closely held firms.

Investing and retirement

Infrastructure building could boost certain investments, while conflicts on trade agreements could hurt many.

His proposed tax changes for retirement plans include extending the age for which contributions to IRAs are allowed and delaying required minimum distributions (RMDs).

Okay, enough, how does one act now?

Some moves still make sense

Tax plan – deferring income into 2017 and adding deductions to 2016 should work well, unless doing so puts you in the AMT, in which case the reverse will work best.

Most of our suggestions from our 2015 year-end planning post still work, including RMDs, 3.8% Medicare surtax, itemized deductions, stock options, investment income and sole proprietor and small business income. Also check out our estate planning post for more ideas.

If your deductions include donating to charities, gifting appreciated assets leverages your donation. That is, you can avoid the income tax on capital gains while still benefiting from the charitable deduction. Watch for the rules on exceeding 30% of your adjusted gross income and donating to private charities.

Research Your Charities

Check out websites like such as ImpactMatters and GiveWell to make sure what you donate has the best impact. Other tools include Agora for Good, a tool to track donation impact over many sectors.

Investing – your strategy should not be altered in any dramatic way now.

If you do sell mutual funds, be sure to wait to buy replacement funds until after the dividend distribution date, so you do not end up with a taxable distribution on gains in which you did not participate

Summary

Many of the income and estate tax rules may change during 2017. However, for now, your safest plan is to assume little changes and stick to the “traditional” techniques outlined above.

If you have any questions, please contact me!

What I learned with my website failure

Yes, robo-advisors are coming. But, I seem to have missed that boat, er self-driving car.

In the effort to design and launch a financial planning website for young people, I learned quite a lot. One thing I learned is that a good idea, even one that many people think is up and coming, is not enough by itself. In fact, it takes a great deal of effort plus substantial capital to launch an effective site. And even then, there is no assurance that you have a successful business.

We did preserve the content that we created and used it to launch a financial literacy website. We hope that people can use this site to better understand their finances. But it will not be a source of revenue: too few want to pay for financial planning advice. It may be the same phenomenon as people searching online for medical questions instead of paying to see a doctor.  Who knows?

Another thing I learned over the last couple of years is that I really enjoy human interaction, helping people solve problems. Creating a robo-planner website wasn’t going to satisfy that need.

So what am I doing? I’m back to concentrating on my law firm, providing financial planning and related legal work plus adding divorce mediation to my business.

Before concluding this post, there are so many to thank. The list of advisors, consultants and friends includes, in no special order: Joseph B. Lassiter, III, Francesca Bartholomew, Shannon M. Bénay, Sima Patel, Jeff Benson, Carl Muscari, Howard Zaharoff, Elliot Sloyer, Peter Demuth, Mark J. Deck, Elliot Kaztman, Catalina Gorla, Meredith McPherron, Jason Yarrington, Ron Aines, Chris Lovell, Amanda Cripps, Adam Weisman, Alyssa Windell, Beth Marcus, Mary Anna Mancusco, Scott Branson, Marissa Branson, and so many more!

Thank you all so much for a great adventure!

Steven

Before you take advice on your finances, ask this question

As I review posts for our sister website on financial literacy, this seemed to be a great post to repeat:

If you want financial advice, before listening to someone, ask yourself one simple question:

“If I’m not paying this adviser, who IS paying them?”

If you don’t know the answer, you may have a problem.

Think about it ….